Mobile payment industry in Philippines is expected to record strong growth following entry of Chinese companies. About 72% of population is unbanked but 65% of the population makes use of smartphones, which increases market attractiveness for mobile payment companies. The major players in the industry, PayMaya and GCash, have received investments from Chinese companies, making Philippines the new battleground for the South East Asian mobile payment industry. According to PayNXT360, The mobile payment transaction value in Philippines expected to increase at a CAGR of 24.1% during 2018-2025. Over the forecast period of 2019 to 2025, the market is expected to reach US$ 19.8 billion by 2025, increasing from US$ 5.8 billion in 2019.

Due to the recent investments in the mobile payment industry, it has resulted in rapid adoption of digital wallet and awareness across the archipelago. This has also benefited the other existing players and invited other major player of the South East Asia mobile payment industry such as GrabPay. GrabPay has entered into a strategic partnership with SM Investments Corp. to expand its reach. BSP’s cashless goal oriented policies and increasing competition has also encouraged other players like such as Banko, BDO Unibank’s eBanking, and Coins.ph to launch their mobile payment services.

Banko Sentral ng Pilipinas (BSP) (Philippine’s central bank) wants to increase the cashless transactions to a total of 20% by the year 2020. It also wants to increase financial inclusion for unbanked and underbanked population. BSP has been encouraging fintech companies to come up with innovative solutions and encouraging new technology for transactions such as P2P lending and distributed ledger technology. After introduction of National Retail Payment System to achieve its 20% goal, it’s working to create guidelines for a “national QR code” to allow inter-operable retail payments in the country. It has also introduced PESONet which is a batch electronic fund transfer credit that could be used to replace checks and Instapay for low value 24/7 electronic fund transfer.

Sensing the growing market, Alibaba, looking to strengthen its presence in the mobile payment industry, partnered with Ayala Corp. and bought a 45% stake in Mynt’s GCash in February 2017. Since then the Philippines’ mobile payment market has received a boost and has invited more customers to join GCash. Global investment firm KKR along with key global player Tencent invested US$ 175 million in PayMaya’s operating arm in October 2018.

Nearly one-third of population consists of millennials and thus both PayMaya and GCash are targeting them through social media. They are also offering easy registration at various outlets across the archipelago for the unbanked population. Both the major players are offering QR scan-to-pay features at many of the micro, small and medium enterprises across the country, which accounts for majority of the business establishments in the country. They are also concentrating on providing services related to remittance by partnering with Western Union and MoneyGram. PayMaya has penetrated into the government system by entering in partnerships with the local governments in issuing all-in-one citizen identity cards and offering services such as paying fees and receiving cash allowances from the local government, which has enabled it to increase market share.